Thomas Cook’s Collapse Prompts UK's Largest Repatriation

 - September 23, 2019, 9:07 AM
Thomas Cook's airline division operated a combined fleet of some 100 airplanes, including 27 Airbus A321s at Thomas Cook Airlines UK. (Photo: Thomas Cook Group)

Thomas Cook Group filed for bankruptcy early Monday morning after talks with Chinese shareholder Fosun, banks, and creditors over the weekend failed to secure final terms on the recapitalization and reorganization of the 178-year-old travel company. The total effect of Thomas Cook’s demise remains unclear, but reportedly it has left some 600,000 travelers around the world stranded. The group reported revenue of £9.6 billion last year and sold holiday packages to some 11 million customers and flights to 20 million customers. Its airline division—comprising Thomas Cook Airlines UK, Condor in Germany, Thomas Cook Airlines Scandinavia, and Thomas Cook Airlines Balearics in Malaga, Spain—has a combined fleet of around 100 aircraft.

In the UK, the government launched what it calls “the biggest peacetime repatriation” in the country’s history and enacted Operation Matterhorn in cooperation with the Civil Aviation Authority to fly back the more than 150,000 Thomas Cook passengers abroad. “The government and UK CAA is working round the clock to help people,” said transport secretary Grant Shapps. “Our contingency planning has helped acquire planes from across the world—some from as far away as Malaysia—and we have put hundreds of people in call centers and at airports.”

The CAA established a dedicated website—thomascook.caa.co.uk—with the details of each flight. The flights will start operating from Monday, September 23, and carry passengers due to return to the UK within the next two weeks. “We have launched, at very short notice, what is effectively one of the UK's largest airlines, involving a fleet of aircraft secured from around the world,” CAA CEO Richard Moriarty noted, warning that due to the nature and scale of the operation, some disruption will be inevitable. According to global flight tracking service Flightradar24, carriers that will operate Thomas Cook Airlines UK repatriation flights include EuroAtlantic, HiFly, Miami Air, EasyJet, Wamos, British Airways, Virgin Atlantic, Nile Air, Evelop, Atlas, and Freebird. The last Thomas Cook Airlines UK flight was MT2643 aboard an Airbus A330-200 from Orlando airport to Manchester.

The UK modeled Operation Matterhorn on the repatriation of passengers after the collapse of Monarch Airways, which failed in 2017. The final cost of that operation to taxpayers totaled about £50 million. The repatriation effort with Thomas Cook is about twice the size, the CAA said.

In Germany, Condor stated Monday it continues operating as normal “as a German company,” though the airline—which Thomas Cook only partly owns—has applied for a state-guaranteed bridging loan “in order to prevent liquidity constraints.” The federal government has begun reviewing the state-backed bridging loan.

The British Airline Pilots Association (Balpa), which last week urged the UK government to intervene, on Monday slammed the UK government’s inertia, calling its behavior “despicable”, and questioned why Condor can keep flying while the UK airline was immediately grounded. “The main difference between the UK and German contexts is that the German government is considering Thomas Cook’s request for short-term state aid, while the UK government gave a firm ‘no,’” Balpa secretary-general Brian Strutton remarked. 

Thomas Cook CEO Peter Fankhauser said the insolvency “marks a deeply sad day” for the company, which pioneered package holidays and made travel possible for millions of people around the world. “We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future,” he said, but the demands by its banks for an additional £200 million facility “presented a challenge that ultimately proved insurmountable.”

Thomas Cook reportedly approached the UK government for financial support, though the government dismissed criticism for not stepping in, claiming “Thomas Cook’s financial problems are substantial, longstanding, and well documented and government financial assistance would not have resolved them.”

Meanwhile, UK business secretary Andrea Leadsom vowed she will write to the country’s Insolvency Service to ask it to “prioritize and fast-track” its investigation into the circumstances surrounding Thomas Cook’s liquidation. “The investigation will also consider the conduct of the directors,” the statement read.